Prolonged Mideast war feared to lead to price hikes: finance ministry

Prolonged Mideast war feared to lead to price hikes: finance ministry By Kang Yoon-seung SEOUL, May 15 (Yonhap) -- The South Korean economy continues to be on a recovery path on the back of strong chip exports, but the prolonged Middle East crisis is raising concerns over inflation and growing financial burdens on households, the finance ministry said Friday. The Ministry of Finance and Economy made the assessment in its monthly economic report, known as the Green Book, noting Asia's fourth-largest economy faces "downward pressure" in the aftermath of the geopolitical crisis. "In the first quarter, the South Korean economy expanded and continues to be on a recovery trend, but downward pressure caused by the Middle East war persists," the report said. "Exports remained strong on the back of semiconductors, and domestic consumption maintained its recovery. But due to the Middle East war, consumer sentiment has weakened, with rising global oil prices leading to inflation and increasing financial burdens on the people," it added. The finance ministry said the government will maintain an emergency response system to minimize the fallout and promptly implement supportive measures, including cash handouts through a supplementary budget. South Korea's consumer prices rose 2.6 percent in April from a year earlier, due mainly to higher oil product prices. It marked the largest on-year increase since July 2024, when inflation advanced 2.6 percent. The consumer sentiment index fell 7.8 points from the previous month to 99.2 points in April. Exports, meanwhile, exceeded US$80 billion for the second consecutive month in April, jumping nearly 50 percent from a year earlier, driven by robust semiconductor shipments. colin@yna.co.kr (END) - BTS to headline halftime show at 2026 World Cup final - (LEAD) Ruling party fails to push through constitutional amendment bill amid opposition boycott - PPP leader says public concerned about Lee's 'hasty' push to retake wartime troop control - (News Focus) Local brokerages beef up preparations for omnibus accounts amid KOSPI surge - (LEAD) N. Korean troops march in Russia's Victory Day parade for 1st time - (News Focus) Confirmed strike on vessel may reshape Seoul's stance on joining U.S.-led Hormuz mission: experts - Trump says, 'I love S. Korea,' after Seoul, Washington sign MOU on shipbuilding cooperation - Budget airlines cut 900 round-trip flights, implement other cost-cutting measures amid soaring oil prices - (3rd LD) Seoul concludes 'external strike' caused explosion on HMM vessel in Hormuz - (2nd LD) Cheong Wa Dae says any attack on civilian ships in Hormuz cannot be tolerated